David Clifton: Licensing Expert – Consensus cannot be the hardest word

David Clifton

If the gambling industry buzzword for the last two years has been “collaboration”, it looks as if this year’s might well be “consensus”. Speaking personally, I am all for that.

It’s a word that featured prominently in speeches by former Labour Party Deputy Leader, Tom Watson, and Gambling Commission CEO, Neil McArthur at ICE on 4 February.

Watson used it at the end of his speech foreshadowing the UK Government’s review of the Gambling Act 2005 when he said: “My final thought is this – if we can’t forge that reasonable, evidence-based consensus on the way forward, the result will not be business as usual. No, the result will be a tougher, more draconian approach driven by those who believe what you do is morally wrong, and that the job of government and regulators is to stamp you out, like big tobacco and liquor.”

In a note of encouragement for the UK-licensed gambling industry, McArthur said in his “Changing mindsets” speech: “I can see that a consensus is building about what needs to be done. Moreover, it isn’t a consensus born out of a ‘belief’ or assertion about what will work.  It is built on evidence and experience”.

Bearing in mind last month’s confirmation from a Government Minister that “nothing is off the table”, the forthcoming review of current gambling legislation will inevitably involve a wide-ranging debate about the future of gambling in the UK. It must therefore surely be sensible for all involved in or with the industry – policy makers, regulators, operators, suppliers, advisors, problem gambling education and treatment providers, and other interested parties (including those with lived experience of gambling related harm) – to focus constructively on areas where a measure of consensus can be achieved?

So how best can we identify those areas? In his speech, Watson suggested that reform of the sector is “not all on the shoulders of the gaming industry” because banks, credit card companies, loan providers and “tech giants” all have responsibilities and a part to play. That certainly ties in with current efforts on the part of the Gambling Commission and the Betting & Gaming Council to engage with counterparts in the financial services and technology sectors. In terms of consensus, these efforts should also be wholeheartedly welcomed by operators who have often complained that, because customers’ money only reaches them after passing through the banking system, it’s unfair that the AML and safer gambling buck appears to rest with the operators alone.

Whether consensus between regulator and regulated is achieved from the product & game design, ad-tech and VIP incentivisation working groups remains to be seen, but early signs appear to be encouraging, with McArthur welcoming the fact that “operators are collaborating for the benefit of consumers”. What we do know is that if the working groups succeed in producing codes of practice that are acceptable to the Commission, they will be included within the LCCP and, where applicable, the Commission’s Technical Standards. The plan is that this will ensure a level playing field exists across the industry. It should also hopefully serve to assist in countering arguments on these issues that will inevitably be advanced to the Government by the health and anti-gambling lobbies.

A further area where consensus should exist is the Gambling Commission’s single customer view” initiative. If, as I fully expect to be the case, operators co-ordinated by the Betting & Gaming Council throw in their weight behind that initiative to support that already being provided by data, technology and marketing specialists, an industry-wide solution to the affordability conundrum may well be achievable. It would certainly be a more constructive approach than that adopted by a few within the industry who still seem to be wrestling with the concept of affordability itself, despite it having been flagged up as a concern nearly two years ago in the Commission’s “Online Gambling Review”.

It is all too easy to say that, with the benefit of hindsight, the industry should have reacted more constructively and quickly to that review. Read it now and it lays out nearly all that has unfolded in the intervening period. I accept that it has taken time for various of the industry sectors to come together (in the shape of the BGC) but no more time must be wasted in identifying fresh areas in which a measure of consensus can be achieved between at least the Gambling Commission and those it regulates in the hope of narrowing down remaining areas of disagreement between the two.

To take another obvious example from the Online Gambling Review, at the beginning of 2018 the Gambling Commission expressed the view that the existing absence of restrictions in online gambling on stakes, prizes and speed of play not only allows a great deal of commercial freedom that is not available in land-based gambling, but also provides online operators with the ability to collect for safer gambling purposes significant amounts of data on their consumers without the land-based operators’ challenge of dealing with anonymous activity. However, in the intervening period since then, we have seen a strengthening of customer interaction requirements in light of perceived operator weaknesses in identifying and interacting with customers who may be experiencing harm associated with gambling.

From comments made by the Commission’s CEO to the Gambling-Related Harm APPG on 12 February, it seems that the regulator’s attitude towards staking limits has also now hardened over the last two years. Of itself, that is no great surprise given that the Advisory Board for Safer Gambling has recently recommended that “unless significant progress is made by operators on player protection”, the Commission should be “working with government to introduce online limits on stakes, prizes and speed of play”.

On this subject, more information is awaited regarding Neil McArthur’s apparent confirmation to the APPG that a review of online stakes will take place within the next six months. In my opinion, it is very much a moot point whether the APPG’s call for imposition of a £2 maximum stake along the lines of that applied to FOBTs (B2 machines) will be heeded, bearing in mind the fact that a £5 maximum stake is permitted for category B1 machines in land-based casinos in the UK – surely a more appropriate comparator if the aim is to achieve parity of online and offline stakes?

However, I fear that another battle will be lost if the online sector battles too hard against imposition of any limits at all on online stakes and prizes. In this respect, I return again to Tom Watson’s recent speech when he warned that: “the tragedy of our recent history on gaming machines in the UK, called FOBTs, is that instead of being prepared to approach its critics and find common ground, the industry doubled down, denounced its critics …. and dug in even deeper. The industry, by its intransigence, ended up with a much worse outcome than if it had engaged with good grace and emollience. The saga of FOBTs should inform our approach in the future. We should all learn from the experience”.  

In the face of such robust condemnation of the industry as has been forthcoming from the APPG, any prospect of a consensus between members of that group and the industry on this topic may be well-nigh impossible, but I hope that minds within the industry are not closed to any suggestion of reaching a measure of consensus on gambling stakes and prizes with the Gambling Commission at least. I imagine that speed of play is already featuring within the workload of the product and game design working group.  

In addition to progressing ambitions to achieve consensus, I would hope to see the industry getting on the front foot in advance of the Government review commencing, rather than, as has been the case far too often recently, being forced on to its back foot in response to whatever allegations are lobbed – whether accurately or inaccurately – in a grenade-like fashion in its direction. Ideally, this would be by way of new industry initiatives to achieve safer gambling aims, even if only to start addressing – before the Gambling Commission asks it to – some of the other issues flagged up in the recommendations made by the ABSG and the Commission’s Digital Advisory Panel. Of course, it may be this is happening already within the corridors of the BGC.

Let me go back now to where I started – speeches – and conclude with some positive messages that can be drawn from them: 

Neil McArthur delivered 3 speeches within 8 working days, not only at ICE as mentioned above, but also at the CMS Gambling Conference and the International Gambling Regulators’ Lunch. Within those, whilst sending out the usual warnings about ever more robust enforcement action for non-compliance, he acknowledged that CEOs and Boards of UK licensed companies are “clearly committed to making gambling safer”, the “industry trade bodies are making public commitments to make gambling safer” and “the change of tone from the Betting & Gaming Council” has been particularly welcomed.

In indicating a way forward for the industry, he quoted Matthew Syed from his book, ‘Black Box Thinking’, in which he described the need to: “…[create] systems and cultures that enable organisations to learn from errors, rather than being threatened by them.” In the hope of achieving a consensus of thinking between myself and McArthur, I have checked out what else Syed has written that might shine a light on that same way forward.

I have discovered that in a similar vein, Syed wrote: “The only way to be sure is to go out and test your ideas and programmes, and to realise that you will often be wrong. But that is not a bad thing. It leads to progress”. That makes perfect sense. However, with the forthcoming government review in mind, I was particularly drawn to Syed’s comment that “ideas should succeed or fail according to rational argument and evidence. It is about data rather than dogma”. Given some of the dodgy data and dogma quoted against the industry in recent months, I have my fingers firmly crossed that rational argument and evidence will determine the outcome of the government review.

On 28 January, McArthur’s boss, Bill Moyes (the Gambling Commission’s Chairman) gave a speech at the North West Reducing Gambling Harms event, in which he also warned about further enforcement action – against individuals as well as operators – for serious licence breaches but nevertheless acknowledged that for the vast majority of the 24 million people who gambled in Great Britain last year, “gambling will remain nothing more than entertainment”. I hope that too is something that will be borne firmly in mind by policy makers whilst the review is being conducted.

And finally – back to Tom Watson again. Surely consensus is possible with this expression of opinion by him on the way forward: “What I want is a system of regulation which protects the vulnerable, sets sensible boundaries, allows reasonable rewards for the industry, encourages innovation, and lets you get on with your business”. Now who would have thought a year ago that we would be agreeing with him? That at least is a sign of progress.

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David Clifton – Director – ‎Clifton Davies Consultancy Limited

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